Lucas's New Headquarters Give Bay Area Film a Lift

By SHARON WAXMAN

Published: July 20, 2005

Daylight streams through the windows of George Lucas's gleaming new $350 million headquarters, situated conveniently -- and to some degree, surprisingly -- in the middle of the Presidio, a former Army post on the edge of this city, where the public can mingle beside the Yoda fountain with company employees.

For decades Lucasfilm, the director's privately held company, and its two main divisions -- LucasArts, the video game producer, and Industrial Light and Magic, a leading designer of movie special effects -- were tucked away in barely marked structures in northern San Rafael and behind the impenetrable walls of nearby Skywalker Ranch.

But as of last week, the company has adopted a new attitude, embodied in this four-building complex, the Letterman Digital Arts Center, in the federally owned park that once boasted an Army hospital and a 13-acre parking lot. Passers-by cannot enter the buildings, but they can press their noses up against the glass of George Lucas's world. And they do, literally.

''This is very public, and it's deliberate on our part,'' said Micheline Chau, the president of Lucasfilm, eating lunch in the company commissary, with its panoramic view of the Golden Gate Bridge, Alcatraz and the TransAmerica building downtown. ''We spent a lot of years hidden away, and I'm not sure if it was good for the company as a whole. The world has changed. To be the epicenter of the digital revolution, we have to be out here, evangelizing the cause.''

City and regional leaders are counting on the new company headquarters to do exactly that, hoping it will serve as a highly visible symbol of the area's connection to the entertainment business and as a magnet for film production and expertise.

''There's something symbolic in it,'' said Stefanie Coyote, executive director of San Francisco's Film Commission, speaking of Mr. Lucas's decision to move his operation to the city from northern Marin county. ''When he was in Marin, people legitimately bypassed San Francisco. He's putting San Francisco back on the map as the leader in film entertainment technology.''

The Bay Area suffered a blow when it lost two beacons of its film community in recent months. Francis Ford Coppola's American Zoetrope facilities shut down in December, and the Saul Zaentz Film Center in Berkeley, founded by Mr. Zaentz, the veteran producer of ''The English Patient'' and ''One Flew Over the Cuckoo's Nest,'' has virtually ceased its activities since January.

But San Francisco and its neighboring city across the bridge, Oakland, have both been investing in renewed efforts to draw Hollywood studios back to the area by converting decommissioned military space and other unused real estate, like a former Amtrak station, for film shoots. The musical ''Rent,'' produced by Revolution Studios, was shot here in part this year, as was the Fox Searchlight drama ''Bee Season.'' Both films are to open in the fall.

Last week, San Francisco's mayor, Gavin Newsom, named a new task force to transform the city into a ''digital Hollywood,'' as the city's announcement read.

And a former Army post, 70 acres along the Oakland waterfront, is being used as a ''film incubator'' for 23 small companies, including a special effects house.

But potentially the biggest new project in the offing is an ambitious plan by the Los Angeles-based Wayans brothers -- the family of comedy actors, directors and producers -- to convert that same 70-acre space into a film studio and entertainment complex. It would include a high-rise hotel, theaters and restaurants, similar to the popular Universal CityWalk at Universal Studios in Hollywood.

''We're very serious, we believe this is going to happen,'' said Will Adams, director of business development for Wayans Brothers Entertainment. ''Oakland was not on my radar. I was talking to New York, Miami, Atlanta, when a colleague of mine from Oakland, Jane Green, heavily recruited me.''

But he quickly became a convert. ''I believe it's a sleeping giant,'' he said. ''There aren't many places where you have 70 acres of waterfront property to develop.''

This month, Oakland entered into an exclusive negotiating agreement with the Wayans brothers to pursue the project, which could break ground as early as next year. The Wayanses estimate the overall venture would cost some $700 million.

In terms of cinema, the Bay Area has probably been most profoundly influenced by Mr. Lucas. From the 1970's onward, his interest in the technological possibilities of film led to the founding of Industrial Light and Magic, the creation of the THX Sound System at Skywalker Sound and many other innovations. Other local entertainment companies -- the animation giant Pixar; the special effects company the Orphanage; and even DreamWorks' animation center, PDI DreamWorks Animation in nearby Redwood City -- have historic connections, through friendship or employment, to Mr. Lucas.

And the 865,000-square-foot Letterman center (the name remains from the hospital that once stood here) creates its own benchmark. For the first time, the LucasArts gaming company and Industrial Light and Magic will be in the same location, sharing the same computer system -- said to be the largest in the industry -- and simultaneous access to a single digital library. Thus all the images created for ''Star Wars'' films, for example, can be easily reused by designers working on a video game, which was previously not the case.

''A lot of people talk about convergence, but we have the benefit of being under one roof, so we're doing it, not just talking about it,'' said Cliff Plumer, Lucasfilm's chief technology officer, who has had the unenviable task of moving both companies to the Presidio while not interrupting the vast flow of data in their daily work.

The broader film industry is trying to create links with the lucrative video gaming industry, and Lucasfilm is now well positioned to do so. Jim Ward, who is president of LucasArts and also head of marketing and distribution for Lucasfilm, said he expected the most growth in the company would come from the gaming division.

''We want to be a Top 5 publisher,'' he said, adding that LucasArts was currently eighth in size among gaming companies. ''No other entertainment company has the expertise in theatrical, home entertainment, gaming, visual effects and sound effects. But we're not some big corporate studio. In terms of people and structure, we're still a small business.'' Lucasfilm does not disclose its annual revenues, but press and industry estimates put its 2003 revenues at about $1.2 billion.

Mr. Lucas has said that with the ''Star Wars'' epic complete, the film and television side of his company will focus on smaller films and work more independently of him. Ultimately the new complex in the Presidio will house 1,500 employees. The first 200 LucasArts employees moved in last week; Industrial Light and Magic and other Lucasfilm workers will move in August and September.

One person who will not be moving, however, is Mr. Lucas. The company's attitude may have shifted, but some things haven't changed, Ms. Chau noted. ''He's staying at the ranch,'' she said.

Photos: The Yoda fountain at the new Lucasfilm headquarters. ''We spent a lot of years hidden away,'' said Micheline Chau, Lucasfilm's president.; The public, too, has been enjoying the new complex in the Presidio. (Photographs by Jim Wilson/The New York Times)